Return on investment has been around for ages, but the meaning of ROI is taking a spin in today’s business world. Companies are no longer purchasing solutions for technology improvement; they are investing in better industry processes as a whole. In return, they can achieve positive cash flows.

Concentra, a national healthcare company, provides a perfect example. With an outdated data center, the company had exhausted their power and cooling resources and was in need of reconstruction.

Concentra did some research and discovered that, by significantly investing in revamping their IT infrastructure, not only could they dramatically improve efficiencies and performance, but they could also create a positive cash flow for the company.

Furthermore, implementation doesn’t have to be risky. Concentra’s Senior Vice President and CIO, Suzanne Kosub, says, “With the right planning and financial analysis, we were able to show exactly how much the project would cost, how long it would take to pay for itself, and what the company would gain moving forward.”

It’s been a busy week as Cisco has been active with Microsoft’s Windows Server 2012 launch activities around the world. We’ve spoken with customers at events in Toronto and New York City with many more in person and digital events to go…

While the week’s focus was on Windows Server 2012 and the datacenter, I thought I would orient this post on how our UCS server family architecture is already benefitting customers in their own Microsoft focused environments. Below is a snippet of metrics, all from publicly available Cisco case studies, and they each demonstrate how Cisco UCS not only advances your data center forward technically but also drives efficiencies in OpEx and CapEx budget spend:

97% – Young America. Increased their server virtualization rate from 20% to 97%.

$1,575 to $80 – Slumberland – Mattress retail firm in the U.S. achieved a reduction in per server management cost.

Cisco’s UCS server family, as well as our other datacenter assets such as our Nexus switch family and Cisco Advanced Services, support the full range of Microsoft environments – Windows Server, Exchange, SharePoint, SQL Server, and VDI. For virtualization, we’re hypervisor agnostic, too so Hyper-V, VMware, etc. are equally supported. Bottom line is Cisco technology will help create a better datacenter for you while also being friendly to your OpEx and CapEx budget spend.

The Healthcare industry whether payer, provider, pharma or medical device manufacturer finds itself at a very interesting crossroad: the patient is the center of attention and each entity now has an increased focus in achieving outcomes from delivered services.

For providers care coordination of at risk patients in particular accountable care, the threat that re-admissions pose, the need to move non critical patients from ER to more cost effective walk-in facilities; operational efficiencies in specialty access, nursing operations and a flattening of in-patient revenue and the need to build referrals for acute care are driving changes to existing business models.

Pharma is long past blockbuster drugs and the merger and acquisition spree to diversify its drug portfolio and is certainly not immune to an outcome centric approach. Pricing will be determined by outcomes and pricing erosion by generics. Pharma will look at ways and means to reach out to patients to manage adherence, making clinical trials more efficient and simultaneously collaborating with other organizations for research into newer drugs.

Medical device manufacturers are seeing new buying centers in the US as a result of the payment sunshine act and in Europe the muscle of a buying consortium. A significant portion of the portfolio is subject to commoditization from players from China and Turkey amongst others. These manufacturers are taking their case to emerging markets and are looking to services to protect their franchise in mature markets.

Finally payers are reacting to the changes brought in by the Accountable Care Act. The exchanges, (look what happened to the payers before and after the exchange became operational in Massachusetts), 50 million new enrollees will enter the system, some through the exchanges others through Medicaid expansion, limits on administrative expenses, no rescission just to name a few. Payers are experimenting with accountable care models, some consolidating managed care medicaid assets, info-medic technologies or simply acquiring hospitals to become payer providers.

This is a “services” moment for the healthcare industry, service that focuses outcomes.

Healthcare providers are responding to changes in the business needs, analyzing opportunities to drive operational efficiencies as well as delivering care through accountable care models. Accountable care requires access to patients wherever they are in the care continuum- in hospital, extended nursing, skilled nursing, hospice or home. Care needs to reach the patient in any care setting. This shifts the paradigm from patients walking in the door to receive care to care coordination and care being delivered to the patient anywhere. Technologies such as video and telehealth can bring access to the patient in any care setting, allowing borderless delivery of healthcare as a service.

As provider systems vie for patients, patient experience and outcomes will be key differentiators. Smart hospitals with technology can provide the creative edge as well as enable new ways to deliver care. In room videos that provide entertainment, education, physician rounding, EMR access for visiting physicians, patient access to families, surveillance and monitoring, connecting patients to nurses can significantly enhance care, experience and with collaborative multi specialty access from specialists anywhere impact even outcomes. Whether in-patient with acute conditions, outpatients in rehab or with chronic conditions payments will be tied to quality cost and access. As care transitions from one setting to another systems needs to integrate the delivery of healthcare and manage these transitions. Provider systems may see the need to share assets such as EMR, PACs, Quality management, analytics and deliver them as a service to the extended ecosystem.

With access and new business models such as accountable care the nature of healthcare will gradually change from prescription to participation. Care coordinators will draw in physicians and specialist to oversee patient examination. Immersive video and Telehealth will allow a group of specialists to examine and determine a treatment plan.

Collaboration across the care continuum is key and immersive collaboration with high definition video is centric to this change. Video in some form or the other has been around for over 25 years, but it existed in pockets or as some would like to call it science projects it never became mainstream. For collaboration video to become mainstream it has to address business problems and become part of the business architecture, in essence integrate into the IT architecture. Standalone video collaboration systems create islands of automation but do not integrate into hospital business assets the scheduling, EMR, ePACS, billing and quality management systems. Further they lack scalability.

As Healthcare operations integrate care pathways with collaboration and participation, home health, care coordination they need to work with various technologies video, wireless, the need to accommodate smart phone, smartPADs – location, context, security, content creation and distribution, delivery of smart Apps, contact centers and patient relationship management. Healthcare services have to be delivered using the network as a platform. This needs the business architecture to be integrated to the IT architecture and the IT architecture to the Network architecture. The network architecture can be built on a solid medical grade network that is smart, intelligent, extensible, sustainable, flexible, modular, scalable, interoperable, economical and future proof. This is complex and needs a strong architectural foundation with services and applications that use these services.

At the end of the day is there an ROI?

Over the past year we have worked on various models to define a potential ROI for the new healthcare needs. We took a business centric approach looking at the business problem and then identifying value drivers that either brings operational efficiencies or drive new revenue. We focused healthcare segment provider, pharma as well as medical device manufacturers. We built several models some for our customers and validated them:

Corporate Campus Clinics – how can Telehealth extend the reach to satellite branches, increase uptake through specialties at the main campus and the spoke branches driving benefit both to the Company in increased savings as well as increased penetration and revenue to the medical service provider

What is the business justification for Telehealth and video to assist in reducing readmissions

What is the ROI in moving patients from ER to Urgent care and how could that change be managed

The business justification for using collaboration technologies to increase referrals as well as build specialty networks for operational efficiencies

Is there an ROI in Training and education?

Some of these models looked at problems that were not driven by reimbursement but had enough value drivers to deliver hard savings and justify the investment. Our models show there is a positive ROI in each of these settings.

As any model goes any change is multidimensional. Any new delivery model should become part of business strategy. A structure should be created to implement this new strategy; appropriate architecture approach and platform solutions should drive the strategy, processes need to change to implement the strategy, finally people should be trained with appropriate change management to make this work.

Is there an ROI, yes but the health of that ROI will depend on how well the organization manages this multidimensional change.

As INSEAD and UC Berkeley Professor Morten Hansen says, “The goal of collaboration is not collaboration itself, but great results.”[1] Working with many of our customers, we’ve developed a framework for assessing the true ROI of collaboration, and it falls into three distinct categories:

Operational ROI allows you to assess how collaboration eliminates or avoid costs associated with running your business. You might cut travel, reduce infrastructure needs, lower bandwidth or energy costs, save on office space and so on. Collaboration tools can replace or reduce the need for many of these types of costs.

Productivity ROI refers to savings generated from more efficient processes, accelerated decision-making and reduced cycle times. Collaboration can lead to significant productivity gains in any number of ways, such as optimizing within lines of business or matching your organization’s expertise to opportunities early on.

Strategic ROI can be the hardest to measure, but perhaps the most transformative. This kind of ROI occurs when collaboration enables your business to take a giant leap forward in areas like enhancing customer satisfaction and loyalty, accelerating innovation, introducing new business models or entering new markets. These types of changes can also reshape an industry in fundamental ways.

These three types of ROI sometime manifest themselves differently across Read More »

The first scenario is one where IT will provide employees with a mobile device. This scenario is industry-specific, has a shorter time to return on investment, is simpler to quantify, and the ROI is easier to prove. Devices stay in the control and ownership of the organization and its IT department. This scenario includes capturing data at the point of retail activity and enabling data capture and access to workers who traditionally do not sit at desks in front of PCs.

Enterprise Wide

The second scenario is where the true BYOD explosion is happening and has the potential to change the way we work everywhere. Cisco’s Internet Business Solutions Group (IBSG) recently conducted a survey, Read More »

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